Commercial Law spring 2008 EX2

Commercial Law spring 2008 EX2 - 420Spr2008-2b B. Law 420...

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420Spr2008-2b B. Law 420 Spring 2008, Exam #2 April 1, 2008 Multiple choice portion of the exam. 35 questions. Each question is 2 points. Select the best answer, even if you feel that it is not perfect. 1. A person may act as a dual agent: A. with the consent of both principals. B. after full and open disclosure. C. never. D. both (a) and (b). 2. Cal sprayed pesticide on his crops in a very careful manner on a windless day. Nevertheless, some of the pesticide spray fell on his neighbor's side of the fence and contaminated the cornmeal for the chickens. The chickens died, and the neighbor sues. What is the likely result? a. Cal is not liable because he was not negligent in his spraying operation. b. Cal is not liable because the neighbor assumed the risk of damage to the feed by placing it so close to the fence. c. Cal is liable because spraying pesticides is an abnormally dangerous activity. d. Cal is not liable for the damage because of contributory negligence. 3. Lydia borrows $500 for textbooks from Gerry. She gives Gerry the authority to sell her DVD player to satisfy his claim is she does not pay the loan back as promised. Under these circumstances: A. an agency coupled with an interest exists. B. Lydia cannot revoke Gerry s power to sell the DVD player. C. Lydia s death does not terminate the agency so long as the debt remains unpaid. D. all of the above. 4. Which of the following is true regarding an agent who is acting for an undisclosed principal? a. The agent with actual authority will bind both himself and the principal on most contracts. b. The third party will never be bound in a contract with the principal. c. An undisclosed principal will bind only himself and not the agent. 5. In order for an agency to be created: http://www.cbe.uidaho.edu/wegman/420%20exams/420Spr2008-2web.htm (1 of 12) [7/8/2009 11:39:18 PM]
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420Spr2008-2b A. there must be compensation to the agent. B. there must be a written agreement. C. there must be a formal contract of some kind. D. none of the above. 6. Moon is a food buyer for Autumn s Iowa health food store. While Moon is in California buying tofu, she finds a solar car for sale for just $3,000. Moon enters into a contract between Autumn, who has been looking for a solar car for the past three years, and the seller. Moon had no authority to make this purchase. However, when Autumn learns of this purchase, she instructs the seller of the car to ship it to her. Under these circumstances: A. Autumn has ratified the contract. B. Autumn is not liable on the contract. C. Moon is liable on the contract. D. none of the above. 7. When an agent s authority is apparent: A. the agent is never liable to anyone. B. it is also actual.
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Commercial Law spring 2008 EX2 - 420Spr2008-2b B. Law 420...

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